Sears 2013 Annual Report Download - page 23

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We seek to achieve the execution of the transformation to drive profitability and position ourselves in the
changing environment by the following:
• Leveraging Shop Your Way and Integrated Retail as the foundation of our member-centric business model
• Realignment of our of businesses to become a more focused company
• Enhancing our financial flexibility to support and fund our transformation
• Allowing shareholders to participate in value creation actions
Leveraging Shop Your Way and Integrated Retail
We seek to proactively transform our business to benefit from the changing retail landscape. At the core of our
transformation is transitioning to a member-centric integrated retailer leveraging our Shop Your Way platform. Shop
Your Way is unique in that it is a program that rewards members, enhances interaction with members and delivers
useful information to our Company. As a result, we are able to be more strategic in how we invest in capabilities to
enable our members to access the widest possible assortment of products and services.
Realignment Of Our Businesses
We are accelerating our pace of change to position ourselves in the changing environment. We are proactively
learning more each day about how our members want to shop and what resonates with them. We are utilizing this
feedback as we continue our transition and invest in two primary areas: Our member-based platform Shop Your Way
and Integrated Retail. These two key elements represent a different way of doing business at Sears Holdings and are
the foundations of our other programs and initiatives. Within these two key areas, we are making substantial
investments in engaging members with personalized, relevant content, offering more capabilities to our members,
continually enhancing member engagement, and building out our platform technology. To enable this change, we
have been strategically realigning our portfolio of businesses to focus on our core strengths, simplify Sears Holdings
and become a more focused company that is more efficient to manage and easier to understand - all while seeking to
enable us to better optimize our allocation of capital and attract the best talent.
We are investing in capabilities that are intended to enable our members to access the widest possible
assortment of products and services. In addition, we are using data and analytics on member trends to make targeted
offers and decisions delivered in real-time. We are expanding our reach through Sears Marketplace, our innovative
community that allows third-party merchants to advertise or sell their products on the Sears Holdings’ family of
websites, where we now offer over 100 million items, and multiple delivery options. We are also developing digital
and social relationships with our members as we aspire to do more than simply transact. We are working to build
valued, trusted relationships with our members by providing differentiated products and services that will be
difficult for others to replicate.
Enhancing Our Financial Flexibility
As we previously stated, we are reconfiguring our asset base as we accelerate our transformation. In 2012, we
separated our Sears Hometown and Outlet Stores business through a rights offering transaction. We consider this
transaction to be successful as it:
• generated approximately $450 million of gross proceeds for Sears Holdings;
• did not reduce our overall scale, as our products and services are sold through their locations; and
• allowed existing shareholders the right to participate in value creation generated by Sears Hometown and
Outlet Stores.
We recently announced that we intend to separate Lands' End and are exploring strategic alternatives for our
Sears Auto Centers business. We believe that these strategic actions are beneficial for a number of reasons:
• First, Sears Holdings becomes a more focused company that is more efficient to manage and easier to
understand;